Who didn't pay their taxes? Fuel seller tops on Revenue's hit list with near €10 million bill

A defunct fuel merchant in Louth last left behind a tax bill of nearly €10 million according to the latest Revenue Commissioner's latest tax default list which also includes doctors, dentists and a surgeon.

They are just some of the latest individuals and companies on the new Tax Defaulter list published by the Revenue Commissioners.

The new Revenue's published List of Tax Defaulters covers the period from January 1 to March 31. During the same three months, investigations resulted in more than €2.218 billion in tax, interest, and penalties who chose not to their way.

While most people pay up when Revenue calls others don't and have to be subjected to extensive audits to find out how much they owe.

Top of that list was Glendalough Stores is now in Liquidation. Based at 66A Newtown Business Park, Boyne Business Park Drogheda, Co Louth. The fuel wholesaler which traded as B.K Oils, ran up unpaid taxes of €3,304,971. The tax office calculated penalties of €3,374,592 and interest €3,304,971. The total bill of amounted to €9,984,534 after the Revenue Investigation Case. None of the money had been repaid by the end of March.

The fuel trader is on Part 2 of the list compiled pursuant to Section 1086 of the Taxes Consolidation Act, 1997. A total of nine cases were published with €11.6m the total settlement amount in these cases.

Where a taxpayer has failed to pay or failed to enter into an arrangement to pay the full amount of the settlement, the amount unpaid as at 30 September 2021 is indicated in the list.

The Revenue say Part 2 settlements are not published where the taxpayer has made a qualifying disclosure relating to undisclosed tax, as defined in Section 1077E (1) of the Taxes Consolidation Act 1997, where the settlement amount does not exceed the relevant threshold, currently €35,000, or where the amount of fine or other penalty does not exceed 15% of the amount of tax.

See FULL PART 2 LIST HERE. 

Revenue also publishes a Part 1 list which includes persons in whose case the Court has determined a penalty relating to a settlement, or has imposed a fine, imprisonment or other penalty in respect of a tax or duty offence.

Details are published when the Court determined penalty exceeds 15% of the total tax (where the total amount of tax only exceeds €50,000) and a qualifying disclosure has not been made:

The biggest penalty determined was against Liam McMahon, a farmer with and address at Drumswords House, 28 Lacky Road, Roslea, Co Fermanagh, BT92 7NW.

The Penalty Determination by the Courts relating to an under-declaration of Income Tax in the amount of €144,897.98

Also listed on Part 1 Eiba, Elsayed Ali Elsayed, of Chapel St, Elphin, Castletrea, Co Roscommon who was fined €10,000 for the misuse of mineral oil. 

See FULL PART 1 LIST HERE

These published settlements reflect only a portion of all Revenue audits and investigations. In the 3-month period to 31 March 2022 a total of 331 Revenue audit and investigations, together with 13,567 Risk Management Interventions (Aspect Queries and Profile Interviews), were settled, resulting in a yield of €2.218 billion in tax, interest, and penalties.

#EXPLAINER AND FURTHER INFO ON LATEST LIST

Part 1: Court Determinations

Court imposed fine, imprisonment or other penalty: Details are published when a fine or other Court penalty is imposed in respect of tax or duty offences. Court penalties may include imprisonment, partly suspended or suspended sentences, community service in lieu of imprisonment, and closure orders.

There were 44 such cases are published and €89,950 is the total of court fines imposed. 
These include:

• 19 cases of failure to file a tax return and failure to produce books and records. Court fines totalling €34,450 and one hour of community service in lieu of imprisonment were imposed;
• 13 cases of misuse of marked mineral oil, in respect of which Court fines totalling €43,000 were imposed;
• 12 cases of excise offences for tobacco smuggling, illegal selling of tobacco and possession of untaxed tobacco for sale. Court fines totalling €12,500, one 6-month sentence and one 8-month sentence (both fully suspended on condition), one 10-month sentence (partially suspended on condition), two 4-month sentences and 100 hours of community service, in lieu of imprisonment, were imposed.  

Court Determination of Penalty: Subject to certain criteria, in settlement cases where there is no agreement to a penalty, or a person fails to pay an agreed penalty, the Court determines the penalty. Details are published when the Court determined penalty exceeds 15% of the total tax and the total of the tax, interest and penalty is more than €35,000 and a qualifying disclosure has not been made: 

Part 2: Settlements

Settlements are published when the extensive voluntary disclosure options are not availed of and the default arises because of careless or deliberate behaviour:

9 cases are published today and €11.6m is the total settlement amount in these cases; 

9 cases were for amounts exceeding €100,000, of which 1 exceeded €500,000  
3 are cases in which the settlement was not fully paid as at 31 March 2022  
€10,465,384 was the amount unpaid as at 31 March 2022. Revenue vigorously pursues collection/enforcement of unpaid settlements. In some cases, collection/recovery of the full unpaid amount will not be possible (e.g. company liquidation)
Revenue Compliance Yield

Background

Revenue says its compliance programme is carried out under the "Code of Practice for Revenue Audit and other Compliance Interventions" (the Code). The significant benefits of making a ‘qualifying disclosure’ are set out in the Code and include availing of reduced penalties, avoiding publication in the List of Tax Defaulters, and avoiding possible prosecution.

Publication

Revenue says it publishes the List of Tax Defaulters under the provisions of Section 1086 of the Taxes Consolidation Act, 1997, as amended. The list is published in two parts:

Part 1: Court Penalty Determinations and Court imposed fine, imprisonment or other penalty

Court penalty determinations are published where a taxpayer has not made a qualifying disclosure, the Court determined penalty exceeds 15% of the total tax, and the total of the tax, interest and penalty is more than €35,000.

All cases where a fine, imprisonment or other Court penalty is imposed by a Court, in respect of a tax or duty offence, are published.

Part 2: Accepted Settlements (and Settlements deemed to be agreed due to full payment)

Where a taxpayer has voluntarily furnished complete information relating to undisclosed tax liabilities and paid the tax and interest due (made a qualifying disclosure of tax defaults), settlements are not published.

Since 1 May 2017, significant changes and restrictions have come into effect where the case involves matters outside the Republic of Ireland, or 'offshore matters'. These changes limit the opportunity to make a 'qualifying disclosure' and coincide with increased international co-operation whereby Revenue gets more and more information automatically from other jurisdictions.

Legislation introduced in the Finance Act 2016 obliges Revenue to identify settlements where the person has failed to pay within the relevant period. 

Settlements are not published where the taxpayer has made a qualifying disclosure relating to undisclosed tax, as defined in Section 1077E (1) of the Taxes Consolidation Act 1997, where the settlement amount does not exceed the relevant threshold, currently €35,000, or where the amount of fine or other penalty does not exceed 15% of the amount of tax.

Calculation of Penalties

Where a qualifying disclosure has not been made, Revenu say penalties between 15% and 100% are applied, depending on the category of default and whether or not the taxpayer has cooperated fully with Revenue in the course of enquiries. The categories of default are Deliberate Behaviour or Careless Behaviour.

Deliberate Behaviour involves either a breach of a tax obligation with indicators consistent with intent on the part of the taxpayer or a breach that cannot be explained solely by carelessness
Careless Behaviour involves lack of due care, which results in the incorrect declaration of tax liabilities by a taxpayer, or which results in the making of incorrect repayment claims. The level of penalty may be further reduced having regard to the level of cooperation provided by the taxpayer once the default is uncovered. Full details of the level of penalties applicable to audit settlements are set out in Penalty Table 1 (Paragraph 5.6.2) of the Code.

Innocent errors and adjustments due to different interpretations of legislation

Penalties are not applicable where a tax default is not deliberate or is not attributable in any way to the failure by a taxpayer to take reasonable care to comply with his or her tax obligations. Neither is a penalty applicable where an adjustment to liability arises from differences in the interpretation or the application of legislation, and the taxpayer could reasonably have considered her/his interpretation to be correct.